If you’re eager to claim Social Security retirement benefits, you’re probably already aware that 62 is the earliest age you can get your checks.
Unfortunately, many financial experts advise against beginning payments at 62 because doing so shrinks your standard benefit and leaves you with much less money each month than you’d receive if you waited longer. The suggestion to delay can be discouraging if you’re counting down the days until you become eligible for benefits.
But the good news is that you don’t necessarily have to listen to this suggestion. In fact, there are three important reasons why claiming your benefits at 62 could be the best financial move. Here’s what they are.
1. You don’t have to worry about outliving life expectancy
Under Social Security rules, claiming benefits early results in a reduced monthly check. For each year you wait, your payment gets bigger up until age 70. The reason for this is simple: The goal is to try to equalize how much money each retiree gets over their lifetime, regardless of when benefits are claimed.
Early claimers get more checks since they start them sooner, but each check is for a lower amount. On the other hand, those who wait miss out on months or years of payments. But while they get fewer total checks, each one is for a larger amount.
The system was designed based on average life expectancies, as projected by actuaries. But many people either pass away sooner than expected or live longer. Those who live longer are better off delaying Social Security claims. If they do, they get more checks than anticipated based on life expectancy. With larger checks coming for more time than projected, they end up not just making up for the earlier payments they missed out on, but also get extra money over time.
Those who pass away at a younger age than expected, though, will end up with more lifetime Social Security income if they don’t delay their benefits claim. If they’d waited, they wouldn’t get enough big checks in the future to make up for income they gave up.
If you don’t want to have to worry about outliving life expectancy but would prefer to start getting payments ASAP, claiming at 62 is the way to go.
2. Claiming at 62 could potentially open the door to retiring earlier
If you’ve been hoping to retire at a young age and enjoy life, you may need Social Security checks in order to make that happen. It’s hard to amass a large enough investment account to fully support yourself without Social Security benefits, especially if you’re planning on leaving the workforce sooner than most people do since you’ll have less time to save.
If your nest egg can’t support you by itself but you’re ready to quit work, you may decide that filing for Social Security at 62 is worth it to supplement your savings and allow you to retire — even if this does mean you do get a smaller benefit for life.
3. An early claim could unlock spousal benefits
Finally, if your spouse wants to claim Social Security spousal benefits on your work history, you’ll have to start getting your own retirement benefits first.
Spousal benefits equal up to 50% of the standard benefit of the person whose work record these benefits are based on. If you earned more than your partner, the spousal benefits available could be larger than their retirement benefits would be. And if your partner didn’t work enough to become eligible for Social Security at all, spousal benefits could be the only income they get from the Social Security Administration.
Now, you should consider the reality that claiming Social Security early shrinks survivor benefits your widow would be left with if you passed away first. But you may decide that it’s worth reducing the benefit available after you’re gone in order to make spousal benefits available ASAP.
You’ll need to consider both the pros and cons of starting Social Security at 62 to decide what’s right for you. But as you can see, there are definitely reasons that beginning benefits at the youngest available age could potentially be a good choice in the end.
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